Lower income growth for REITs
Kenanga Research is taking a neutral stance for Malaysian REITs (MREITS). Quarter-on-quarter bottom-line growth for MREITS was slightly negative from 2% to 10% less realised net income (RNI) due to lower topline due to seasonality factors such as lower rent turnover and weaker margins. As expected, it was slightly worse off than the first quarter of 2016. All MREITs saw positive topline and bottom line growth of 2%-8% RNI year-on-year (y-o-y), except for Axis REIT due to higher operating and new acquisition costs. FY16 is a major lease expiry for Pavilion REIT and Sunway REIT, with retail segment remaining soft in 2016 and into 2017. The research house recommends investors to look out for selected MREITs with visible acquisition pipeline in FY17, with selected picks on more resilient MREITs with acquisition potential such as Pavilion REIT, SunREIT, KLCC, Axis REIT. (The Star Online)
Call to release more idle land in Selangor
Property developer Emkay Group is suggesting the Selangor government consider releasing more idle land for developers to build affordable houses. In 1995, the company partnered with the state government to build 15,000 units of affordable houses in Damansara Damai, and it is keen to replicate that success. Currently, it is managing several Rumah Selangorku projects in Cyberjaya. It builds 900-sq-ft apartments that are priced from RM380,000 each and have two or three bathrooms. (New Straits Times Online)
PPR housing facilities will improve if controlled by state govt, says MP
Facilities at the low cost PPR flats may improve if their management boards were controlled by the state governments, said Serdang MP Ong Kian Ming. He noted that PPR flats are often poorly maintained because their managements often lack the money and the muscle to enforce penalties against tenants who break the rules. Since the state is in charge of the properties, it can keep ownership of the joint management bodies (JMB), which are tasked with collecting fees and managing upkeep. There are currently no laws to penalise tenants for failure to pay the fees. (Malay Mail Online)
Sime disposes Semenyih land, buys plantation in Yong Peng
Sime Darby Bhd is selling a 805-acre tract of land in Semenyih, Selangor to sister company I&P Group Sdn Bhd for RM428.8 million cash. Sime Darby said the land, which is located in the Hulu Langat district, was not a key development focus area for its property arm. The plantation giant will use the proceeds from the disposal to develop its property projects such as Malaysia Vision Valley and City of Elmina. It is also buying two oil palm estates measuring 769ha and a mill in Yong Peng, Johor from I&P for RM106.7 million cash. About 98% of both estates, which are near Sime Darby Plantation estates in central Johor, are planted with oil palm. In addition, Talisman Estate has the potential for property development, as it is located about 12km away from Kluang. (The Star Online)
Low, medium-cost homes occupied by the wealthy
Parti Cinta Malaysia (PCM) wants the Penang government to crack down on the sale and rental of low and medium-cost (LMC) apartment units meant for first-time home buyers to wealthy third-parties. Investigations revealed that unit owners of the LMC apartment in Gelugor are renting and selling to third parties. Some offer rental rate of up to RM850 per month, while others sell their units for as much as RM348,000. Checks by PCM members found luxury cars and motorbikes parked in the compoud, including a BMW Motorrad GS superbike (RM114,900), Triumph Street Triple superbike (RM53,900), a KTM 1050 Adventure superbike, the latest Toyota Hilux Double Cab, a Honda Jazz iDSI and many other vehicles that cost above RM80,000. Some of the vehicles cost more than the units, which were sold at RM72,500 each. Owners of LMC units are not allowed to rent them out and the units cannot be sold in the first 10 years. (Malay Mail Online)
Expensive vehicles costing more than the units found at PPR flats. (Photo from FMT)
Lion Diversified sells Melaka office cum factory for RM30.5mil
Steelmaker Lion Diversified Holdings Bhd is selling an office cum factory for RM30.5 million, comprising a two-storey office building and a single storey detached factory, which sits on a 4.013-ha land in Mukim Cheng, Melaka. Most of the proceeds from the sale will be used as working capital and some to settle part of its outstanding debt owed to the purchaser. Lion Diversified will lease back the property for three years from the new owner, Sritama Jetty Sdn Bhd. (The Edge Markets)
